Overview
Bad credit loans are intended to help those who lack access to more traditional financial products and services due to a low credit score or lacking a credit history. Traditional financial institutions like banks and credit unions may have more stringent credit requirements. Therefore, alternative lenders/private online lenders meet an unmet need in the market by providing online loans to customers who lack a good credit score or an established credit history.
Low Credit Score Causes
Subprime and near-prime credit scores (between 300-599 and 600-659 respectively) are usually the result of multiple factors, which may include the following:
- Missed or late payments on credit cards, loans, and/or other bills.
- Loan repayment defaults.
- A high credit utilization ratio (above 30%).
- Errors on the credit report.
- Maxed-out credit cards.
- Paying only minimum balances.
A lack of a credit history is more prevalent among newcomers and younger adults who’ve only just started building their credit histories in their country of residence. Lower credit scores and sparse credit histories result in higher perceived credit risk and reduced accessibility of financial products and services. Bad credit loans provide quick funds to those who are unable to access traditional financial products and services.
Pros of Bad Credit Loans
- Quick access to funds. Once your loan application is approved, you may have funds deposited into your bank account in as little as 24 hours!
- No credit check. We don’t check your credit score or credit report during our simple and quick online application process.
- Easy and fast online application process. The online form will ask for a few basic details like your postal code, requested loan amount, and so on. Once you successfully submit your application, you will receive an immediate response.
- Advanced encryption technology. We use sophisticated encryption technology to keep your personal data safe and secure.
Cons of Bad Credit Loans
- Bad credit loans may be associated with higher interest and fees due to higher credit risk. Due to the higher perceived credit risk, online lenders may require higher interest and fees, while borrowers who have higher credit scores or more consistent credit histories may benefit from more favourable loan terms and access to more traditional financial products and services.
- Missed or late payments may result in additional fees. If you miss payment due dates or are late making payments, you may face higher fees.
How to Apply
If you need quick funds to cover an immediate expense, you may consider applying for a loan online via LendProConnect. Simply fill out a quick online application and submit. You will get an immediate response and may have funds deposited into your bank account in as little as 24 hours!
The Bottom Line
Bad credit loans are designed for Canadians who may lack access to traditional credit due to less-than-perfect credit scores and histories. Due to a higher perceived credit risk, these loans may come with higher interest and fees. Intended to provide quick access to funds, no credit score loans offer the benefit of a quick and easy online application process and flexible requirements. If you wish to improve your credit score, sign up for Credit Verify! The registration is quick and easy, allowing you to monitor your credit score and automatically detect mistakes on your credit report.
